1. Fast Food Restaurant Business
1. Executive Summary:-
Fresin Fries is a locally owned fast food outlet that will be positioned as an international
franchise through our creative approach to the company's image and detail presentation.
Fresin Fries will provide a combination of excellent food at value pricing, with fun
packaging and atmosphere. Fresin Fries is the answer to an increasing demand for snack-
type fast food, to be consumed while window shopping and walking around inside a
In today's highly competitive environment, it is becoming increasingly difficult to
differentiate one fast food outlet from another. Singapore, a city state, is now becoming
the model metropolis for Asia's new economic boom. With more than 11 million visitors
yearly, mainly from neighboring countries (Malaysia, Indonesia, Thailand and the
Philippines), Singapore's retail sector is the strongest in the region.
Our main priority is to establish one outlet in a crowded mall, preferably in one of
prominent shopping malls in Singapore. Later, our effort will be a further development of
more retail outlets in the surrounding area.
This plan is prepared to obtain a location for the initial launch of this concept. Additional
financing will need to be secured for the two subsequent outlets, anticipated in month
13 and early in year three. The financing, in addition to the capital contributions from
shareholders, will allow Fresin Fries to successfully open and expand through year two.
The initial capital investment will allow Fresin Fries to provide its customers with a
value-driven, entertaining experience through the creativity of its founders.
2. Fresin Fries will entice youngsters to bring their friends and family with our innovative
environment, fresh-cut Belgian fries, and selectionof unique signature dipping sauces.
Please note that all tables are in Singaporean Dollars (1 USD= S$1.60)
To establish a presence as a successful local fast food outlets and gain a market
share in Singapore's fast food industry.
To make -------- a destination spot for mall-goers.
Our main goal is to be one of the most successful fast food outlets in Singapore, starting
with one retail outlet located inside a major shopping mall as a "market tester."
3. Fresin Fries will strive to be a premier local fast food brand in the local marketplace. We
want our customers to have the total experience when visiting our outlet(s) and website as
they will learn about this fascinating new "pop culture." We will sell merchandise from
pre-packaged sauces and t-shirts, to potato cutters, all with our official brand attached to
Our main focus will be serving high-quality food at a great value.
1.3 Keys to Success
To succeed in this business we must:
Create a unique, innovative, entertaining menu that will differentiate us from the
rest of the competition.
Control costs at all times, in all areas and implement a conservative approach to
growth policy. Although, we provide more than enough fund to open more than
one outlet, we want to be on the safe side of the business.
Sell the products that are of the highest quality, as well as keeping the customers
happy with all of our product categories from food to store merchandising.
Provide 100% satisfaction to our customers and maintaining the level of excellent
services among other competitors.
Encourage the two most important values in fast food business: brand and image,
as these two ingredients are a couple of main drivers in marketing communications.
Get access to high-traffic shopping malls near the target market.
Promote good values of company culture and business philosophy.
What is Fresin Fries?
Fresin Fries sells gourmet fries in a cone with a choice of sauce. We use the concept of
Belgian Fries, where the fries are all made from fresh potatoes and fried twice. Our
4. outlet also provides excellent and friendly customer service to support the ambience of
fun, energetic and youthful lifestyle.
Youthful and fresh surroundings
We will imitate successful establishments, such as Jamba Juice and Starbucks, which
represent the majority of our core target market, between 18 to 35 years of age. Our
store will feature display cooking of our featured Belgian Fries from cutting to frying.
Our customers will also be able to read our in-house brochures in regards to all
knowledge about Belgian Fries and our featured sauces. Our store will be decorated
with fast food setting, such as a bright counter and display menu on the wall.
Each store will offer nothing but freshly fried Belgian fries, sandwiches and variety of
unique blend sauces, all served with old-fashioned home-style care.
Our store is open everyday from 10 am to 9 pm.
Variety, variety, variety
A different selection of sauces will be featured every three months and we will also
change our Italian soda flavors to accompany our fries.
2.1 Company Ownership
Fresin Fries is a privately held company. It will be registered as a Limited company,
with ownership 25% - Guy Fry, 25% - Sam Sauce, 25% - Carl Cone, 25% - Harry Hip.
Guy Fry and Sam Sauce have more than 10 years of experience in the food industry.
Both are currently employed as Corporate Staff of Company A.
Sam Sauce holds an MBA degree from University V. A true entrepreneur by heart, his
latest entrepreneurial project is a diamond store in the heart of Singapore.
Guy Fry holds a BA degree in Graphic Design from the Academy of Arts. His projects
are widely varied from product design to brand development of several reputable
Harry Hip holds a MS degree from Institute Y. He completed several projects and
served as project manager for multi-national companies in Singapore.
Carl Cone holds a BS degree from University Z, majoring in Management and
Information Technology. Prior to his return to Singapore, he has held several
management positions in a U.S.-based IT company.
5. 2.2 Start-up Summary
The retail outlet will be rented at one of the target location shopping malls. Our
preference is Space A, for the main reason of reaching larger traffic.
Startup requirements will be financed through owner investments.
Kitchen and Fixtures
Furniture and Interior
6. Packaging and Stationary
Total Start-up Expenses
Other Current Assets
2.3 Company Locations and Facilities
Fresin Fries locations will range in size from 50 – 70 meter square and will seat from 15
– 25 guests. Our first location will be on the larger end of this range. The location will
feature its own originality in merchandise display and other brand building attributes.
We will equip the outlet with modern furniture and aim for cleanliness and an open
feeling. We are currently looking at several possible sites in shopping malls along
The space selection will be chosen based upon the following criteria:
Community size: minimum of 800,000 people within a radius of 8 kilometers.
Large percentage of teenagers in the community.
7. All of these qualities are consistent with Fresin Fries' goal of providing a top quality fast
food experience. We want "word-of-mouth" to be our best form of marketing, where
our customers value our brand as something exciting and cannot wait to tell their
friends and neighbors.
Fresin Fries will directly compete with several fast food joints inside the chosen
shopping mall, including Tori-Q (yakitori specialist), Bee Che Hiang (chinese sausages),
Bread Talk (one of the most successful bakery franchises), and Pizza Walker (locally
owned pizza chain).
We want to focus only on selling fries. Alcoholic drinks will not be sold in our outlet, as
Fresin Fries promotes a healthy and positive Singaporean lifestyle. Instead, we will offer
Italian Soda to complement the fries.
In promoting the Fresin Fries lifestyle, we will offer various merchandise with our logo
and colors, from hats to t-shirts to potato cutters to our signature sauces, so that our
customers can enjoy Fresin Fries at home. Our signature sauce is exclusively
manufactured by Company Q. They can be also purchased at selected retailers.
3.1 Product Description
Fresin Fries primarily sells fries and our unique dipping sauces. Main products sold are:
Belgian fries, Italian sodas and corporate merchandise.
Belgian-style fries are available in large (choose 2 dips), small (choose 1 dip), with
addition of garlic Fresin (add S$0.25).
The dips for Belgian style fries can also be served with sandwiches; they are available
in more than 20 flavors:
Thai Chili Ketchup
Creamy Wasabi Mayo
Roasted Pepper Mayo
Black Pepper Sauce
8. Jalapeno Ketchup
Hot Chili Sauce
3.2 Competitive Comparison
Fresin Fries has several advantages over its leading competitors:
Unique "fusion" concept of dipping sauce.
We expect a high degree of enthusiasm and offer a fun store with friendly staff,
that reflects the company's youthful and energetic culture.
Supporting merchandise items that support the company's brand building.
Our fried potato is made 100% fresh, compared to most fast food outlets that
use frozen fries.
Our dipping sauce is also made fresh without preservatives.
Our innovative packaging will be more entertaining than our competitors; a
single cone with a cup reserved for dipping sauce.
Company Clean Value Merchandising Hang
Simple Fresh Cool Pop
Fresin Yes Yes Yes Yes Yes Yes Yes Yes
McDonald's Yes Yes Yes Yes Yes No Yes Yes
KFC Yes Yes No Yes No No Yes No
Tori-Q Yes Yes No No Yes Yes No No
Roti Boy Yes Yes No No Yes Yes No No
Bread Talk Yes Yes Yes No Yes Yes Yes No
Yes Yes Yes No Yes Yes No No
Pizza Walker Yes Yes Yes Yes No Yes Yes Yes
9. 3.3 Sales Literature
Fresin Fries will use advertising and sales programs to get the word out to customers.
2,000 color brochures to be distributed throughout destination shopping mall and
facilities: in-store, cinemas, area eateries, information during the grand opening
in January 2005.
Half page magazine reviews in Singapore's lifestyle magazines that advertise the
presence of the outlet.
Fresh potatoes will be delivered weekly by our distributor directly from the U.S. We also
have an agreement with Company Q to exclusively manufacture our signature sauces,
and all of our merchandise will be printed and produced by our partner's office in China.
3.5 Sales Programs
Each opening of Fresin Fries will have, more or less, the same marketing mix as the
others. Below are the programs that we will develop to open each location.
Each new outlet will have outdoor signage as soon as possible. We want the signage to
be supported by banners before the opening.
Point of Purchase
We will use "tray toppers" to explain the concept and philosophy of Fresin Fries. We will
also sell gift certificates, announce future job openings, and possibly mention franchise
Direct Mail Piece
A stand-alone piece, folded, will be produced in full color on heavy weight paper. Inside
will be all the important details of Fresin Fries, explanation of our menu, prices, house
of operation and a locator map.
10. 3.6 Future Products
For now, we will focus on selling fries and signature sauces. However, as we grow
further, we will add new categories to our menu, such as Belgian Sandwiches and
In the future, our growth strategy will be offering the franchise of our brand to food
entrepreneurs in the region. The success of Bread Talk franchising in Indonesia is the
best example on growing globally.
Sales of Fresin Fries will not only generated from the selling of its famous Belgian Fries,
but also will be generated by the conception of an innovative package menu called the
"value meal." It primarily consists of a combination of our featured Belgian Fries,
sandwiches and Italian soda at greater value than selling at individual items. Further
customization could be done by selling a bigger size of fries called "Uber Fresin" to
attract price sensitive customers.
Brochures and handouts will explain that we can handle banquets and private parties,
in addition to our brochure that will list our daily entrees.
Market Analysis Summary
Consumer expenditures for fast food in Singapore rose during the end of the year 2000,
followed by the recovery of Singapore's economy. The increasing number of new
establishments such as fast food franchises, fancy restaurants and gourmet bakeries
around Singapore has shown a significant growth in this sector. Food spending is
around 56% of total consumer expenditures in Singapore, and consumer spending on
leisure and recreation made up of 13% of total consumer spending.
A much broader appeal exists for weekend slots because those are the days when most
of our core target market enjoys the mall going activities.
Age - Youngsters, single, currently enrolled in college and high school.
Family unit - We will also appeal to families (young families) with children.
Gender - We will target both sexes, with a slight skew for males due to their
lower attention to dietary concerns.
Income - We will appeal to the medium income individuals and to all in the lower
medium income bracket.
11. Our concept will have very broad appeal. It is our goal to be the hip destination for fast
According to a recent public survey of people 15 - 45 years old, 80% of those
interviewed like fast food. 90% of them like fast food on a regular basis, and 10% of
them claimed that they like fast food "very much," or "love" fast food. The survey also
provided the following particular reasons for the increasing popularity of fast food:
People have 52 weekends and three long holidays a year. Most of Singaporeans
love to window shop, and when they do strolling around the shopping district,
they need a quick bite to accommodate their activities.
White-collar workers in offices have stopped bring lunch, and enjoy chicken,
hamburger, pizza or other fast food joints in the vicinity.
Parents give more money to kids and students to buy lunch. Fast food is
naturally their first choice, because of the brand building effort that heavily
targets their age group.
Eating out still remains as Singaporeans' common habit of life. They do not
perceive fast food is a luxury, and they enjoy it by bringing their family,
especially if they have smaller kids, in the environment of the western-style fast
4.1 Market Segmentation
We are targeting young Singaporeans as our primary market. Orchard Road is the place
to meet and hang out after school. Due to heavy extra-curricular activities among
Singapore's youth, it is common for high schoolers to have lunch inside shopping malls,
and not at home. They tend to flock to fast food joints inside shopping malls across
Our secondary market segment is the "Working Singaporeans." With so many shopping
malls in the vicinity, Orchard Road is the haven for shoppers and job seekers alike. In
the new Paragon Shopping Centre, there are more than 8,000 workers currently
working as sales persons and boutique staff. There are more than 10 major shopping
malls across Orchard Road, including Ngee Ann City, the biggest shopping mall in the
nation, employing more than 50,000 workers.
Lastly, Orchard Road is also the destination for tourists staying in the area. The Meritus
Mandarin, Crown Prince Hotel, the Hilton, and Popular Hotel are a few of the biggest
accommodations in Singapore. Tourists will stroll Orchard Road, hunting for the latest
trend in fashion and have no time to stop for a full meal during shopping. Fresin Fries is
the alternative for a quick bite while shopping the fancy boutiques in the area.
12. Market Analysis
Potential Customers Growth
Young Singaporeans 15% 5,000,000 5,750,000
Working Singaporeans 10% 3,000,000 3,300,000
Tourists 20% 3,800,000 4,560,000
Total 15.52% 11,800,000 13,610,000
13. 4.2 Target Market Segment Strategy
Fresin Fries intends to cater to the bulk of teenagers and youngsters in Singapore. We
have chosen this group for several important reasons. It is our goal to be "the
extraordinary fast food place" and we believe that the age group from 15 to 25 is the
primary age where brand building efforts could take place. They are on limited or fixed
incomes and seek a value/price relationship that will not stretch their budgets.
Our secondary target is between the ages of 25 and 37, which are a heavy
lounge/restaurant user group. They are more flexible in budgets and seek more than a
Our lunch strategy is dual purposed. First, we are featuring fresh fries to fill Singapore's
craving for fast food as most ideas of lunch is a quick bite not a heavy meal.
Second, we want to keep the price point at lunch as fair as possible to keep us in
competition with other fast food outlets. At S$4.00 for a medium size fries, we are only
slightly above the segment, but we offer much more excitement than the rest of the
4.2.1 Market Needs
Fresin Fries sees our targeted market group as having many "makan" (eating)
Singaporean Dollar needs. A recent Consumer Trend and Analysis by Euromonitor
identified the following needs among our target markets. Our core group:
Wants variety and flavor in its food, preferably something fried
Looks for speed of service
Wants an entertaining and fun experience
Insists upon a clean, friendly, and attractive environment
Adopts a global lifestyle
Is computer literate
Enjoys eating out
Has an active lifestyle
Comes from various ethnic backgrounds
According to a GAIN Report published in 2000, potatoes are the second largest
commodity of US exports to Singapore after fresh fruit, valuing almost USD $13 million
per annum. This is caused by the increasingly younger demographic and rising incomes
throughout Singapore that have led to lifestyle changes that are influencing consumer
purchases, food, and entertainment choices. Some changes taking place include a
larger professional class with more working women, which means greater disposable
14. 4.2.2 Market Trends
In the past, Singaporeans preferred Western chain restaurants. This was the time when
KFC, McDonald's, Long John Silver's and Pizza Hut were dominating most of the chains.
But the trend seems to have shifted in the last decade, with the success of the locally
grown brands, such as Bread Talk and Bee Che Hiang. Many of these local brands grew
to become giant franchises that dominate the Southeast Asia region. For instance,
Bread Talk controls 55% of Indonesia's bakery market.
The key to success for these foreign chains was mainly due to the popularity of
Singapore as tourist destination for these countries. Tourists are the strongest "buzzer."
Usually after they went back from vacationing in Singapore, they told friends and
families about new things in Singapore, including new shopping malls, new boutiques,
new restaurants, and new fast food joints. The fascination of Asian tourists coming to
Singapore has positioned the city itself as an aspiration to modern life in the region.
Many local entrepreneurs camouflaged their retail stores as an international brand in
accordance to what they sell. For instance, there is a local entrepreneur who created a
Japanese name to sell yakitori (Japanese BBQ meat skewers), and there is a fashion
boutique named after an old Italian movie.
4.3 Industry Analysis
Despite the prolonged effects of the Asian Economic Crisis followed by political turmoil
up to mid 2001, Singapore's food service industry witnessed growth over 2000/2001 at
4 - 5% in terms of units and transaction (Euromonitor). Much of this growth was
contributed by the cafes/bars, fast food, and food retail sectors, whose wide appeal
amongst a young population, for whom time is of a premium, led to high levels of
growth. This growth is underpinned by market demand and lifestyle changes, such as
seeing eating out as part of trendy lifestyle.
Entry of major multi-national food service operators into major shopping destination in
the late 1980s until the 1990s led to growth in competition in the marketplace, mainly
from fast food chains. This stimulated the rise in the number of fast food units, both of
international and local chains, that started in the early 1990s. Although there was
a slowdown during the economic crisis in 1998, the food service industry recovered
faster than others, particularly during 2000 and 2001. Recent bombing tragedies have
also proven that negative effects on this sector are moderately short-term.
Franchising became popular in the food service industry through the introduction and
entry of multi-national food service brands, primarily U.S.-owned enterprises, such as
KFC, Pizza Hut and McDonald's. Currently, there are many local chains that have also
experienced growth by applying this system to their operations.
15. 4.3.1 Trends in Food Service Retail
According to government surveys, Singapore's spending on "eating out" is continuing to
increase. Spending on cooked food as a percentage of total average food-spend
reached 55% in 1998. The growth in spending in the food service sector arises from a
number of factors:
Increased affluence amongst Singaporeans, especially those under the age of 40
Increases in the number of expatriate residents, which has more than doubled
Increased convenience-seeking amongst younger Singaporeans who live in a
hectic city today compared to the much slower pace of life that existed 20 years
When they want convenient cooked food, Singaporeans have long turned to the local
hawker stalls, rather than prepared ready-to-cook or ready-to-eat processed
convenience foods. As the numbers and variety of food service outlets has increased in
Singapore, locals have adopted the convenient products of other food service outlets,
especially the fast food outlets, as alternative sources of convenient cooked food.
Younger middle and upper income group families and individuals are also frequent
users of the full service restaurants, modern-style coffee shops and cafés that now exist
all across Singapore.
Over the past 5 years, there has been a general upgrading in the food service sector
which has seen the establishment of more air conditioned food centers (food courts)
that are considerably cleaner than the traditional hawker markets. At the same time,
increased investment from foreign and local businesses in the sector has also produced
an increase in the numbers of:
Foreign chains, including chains such as Outback Steakhouse.
Modern retail bakery/café outlets such as Bread Talk.
Modern coffee shops such as Starbucks.
4.3.2 Competition and Buying Patterns
The competition in this arena is the fiercest in all other metropolitan areas in SE Asia.
Singapore is a compact city, but has a lot to offer. Usually there are a minimum of two
of the same outlets within a radius of less than 300 meters. For instance, Bread Talk
opens one outlet inside the Ngee Ann City Shopping Centre and another just across the
street inside the Far East Plaza Shopping Centre. It is quite common for retailers to
implement this kind of strategy, due to the high volume of people strolling around the
main area of Orchard Road.
16. Another reason is because many retailers do not want to lose sales opportunity, as the
competitors are offering substitutions and similar product categories. This phenomenon
has made Singapore the best place to shop. If you just missed Häagen Dazs waffle at
CK Tang Shopping Mall, there is another Häagen Dazs across the street at the new
Paragon Shopping Centre.
4.3.3 Main Competitors
Our main competitors in this segment are any food outlets within the 300 meter radius
along the Orchard Road. In our location, there are Tori-Q, Pizza Walker, Starbucks,
Bread Talk, and Rotiboy.
Tori-Q is locally owned franchise who sells Japanese BBQ skewers. Established in 1998,
Tori-Q had expanded its operation into neighboring countries, Indonesia, Malaysia, and
Thailand. Tori-Q is popular among local teenagers as it offers fast service to its
customers. Commonly, Tori-Q outlets are rather small, and can only serve a maximum
of 6 guests. It is a choice for those who are in a hurry and would like to grab a quick
lunch on the way.
Pizza Walker is a joint venture positioned as gourmet pizza joint in Singapore. Most of
its retail outlets are decorated with welcoming ambience, such as flowers and see-
through kitchens. Pizza Walker is a good place to hang out, and the place is always full
during lunch hour. It has more than enough tables to serve a maximum of 55 guests.
Its specialty is all-you-can-eat pizza!
Starbucks' strategy entering the lunch market had made some impact in Singapore.
Usually, a lunch menu in Singapore consists of "fried and BBQ stuff" such as roast pork
with rice or the Big Mac. Starbucks is one of the first food retailers that popularized
"light and healthy" alternatives such as salad or lean sandwich as an options for
Singapore's lunch accommodations.
As the most successful franchiser in Singapore, Bread Talk is surely becoming a threat
for most food retailers. Bread Talk not only rented most of the retail space along
Orchard Road, but now they are doing delivery to offices and apartments nearby. Bread
Talk outlets usually consist of a huge see-through kitchen, and bread trays ready for
pick-up by customers, with three or four cashiers at front, to speed up the queue.
Rumor has it that Bread Talk sold more than 35,000 breads each day in just one of
their retail outlets.
A Malaysian franchise. Rotiboy is quite popular in the region as it is now expanding into
17. several cities in Indonesia, Vietnam, Thailand, and the Philippines. Rotiboy offers
simplicity for quick lunch franchiser, and often considered alternatives for its long
4.3.4 Foreign Vs. Local Franchising
Around 40% of the franchises operating in Singapore are foreign. Home grown
franchises are still in their maturing stages as they start to expand globally. Franchises
from the U.S. account for 65% of foreign brands, with big players such as KFC,
Starbucks, Pizza Hut, etc. Due to high capital investment, Singapore conglomerates
tend to dominate the industry.
Home grown franchises are more often sought more by young entrepreneurs than are
their Western counterparts, as they offer greater flexibility and lower franchise fees to
operate. Unlike Western license holders, home grown franchises are more efficient in
the overall supply chain management as the basic raw ingredients are commonly found
anywhere in the region.
Strategy and Implementation Summary
At first, we will open one outlet inside the New Paragon Shopping Centre. This will
become our "market testing area," and as we go further, Fresin Fries is planning to
open another in nearby shopping malls. In attracting customers to try our fries, we will
provide a see-through kitchen, so that people will see how we are committed to
freshness in our products.
The kitchen will also let out an aroma of our freshly fried fries into the surroundings
area, so that people will come and try our products.
5.1 Competitive Edge
Our unique dipping sauces blend local taste and international into one fusion
recipe for the signature sauce.
Enthusiastic and friendly staff
Supporting merchandise items that support company's brand building.
Our fries are made of 100% fresh potatoes, unlike the frozen fries used by
Innovative packaging will position us at the same level with foreign fast food
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5.2 Marketing Strategy
Our strategy is based on serving our markets well. We will start our first outlet as a
"market tester" that could become a model of the expanding number of outlets in the
future. Concentration will be on maintaining quality and establishing a strong identity in
the local market.
A combination of local media and local store marketing programs will be utilized at each
location. Local store marketing is most effective, followed by print ad. As soon as a
concentration of stores is established in a market, then broader media will be explored.
We believe, however, that the best form of advertising is still "buzz." By providing a fun
and energetic environment, with unbeatable quality at an acceptable price in a clean
and friendly outlet, we will be the talk of the town. Therefore, the execution of our
concept is the most critical element of our plan. We will actively build our brand,
through the selling of supporting materials, such as merchandise, promotional items
and other marketing gimmicks similar to those of other fast food franchises.
5.2.1 Pricing Strategy
Our pricing strategy is positioned as "generic", meaning that S$4.00 is the average
consumer spending for a snack or light lunch in Singapore. Leveraging the volume of
fries, Italian Soda, and signature style sauces to be sold, we are serving the majority of
5.2.2 Brand Challenges
Fresin Fries must establish a distinct brand to stand out from the other Western-style
fast food competitors.
Our logo is distinct as fresh, energetic and playful with color elements that are
Product names are geared toward the target market (teens), with items such as
"Frenzy Fresin" and "Uber Fresin" which are fun and easy to remember.
5.2.3 Marketing Programs
We will deploy three different marketing tactics to increase customer awareness of
Fresin Fries. Our most important tactic will be "word-of-mouth" and in-store marketing.
This will be by far the cheapest and most effective of our marketing programs because
of the high traffic in targeted shopping locations.
19. The second tactic will be local store marketing. These will be low-budget plans that will
provide community support and awareness of our facility. The last marketing effort will
be utilizing local media. Although, this will be the most costly, this tactic will be used
sparingly as a supplement where necessary.
o In-store brochures containing our concept and philosophy.
o Wall posters.
o Design concept.
o In-store viewing of making fries process from cutting to frying.
o Standing signage inside malls’ lobby/aisle.
o Outdoor signage (if possible).
o Grand opening promotion.
o Party catering.
o Merchandising items.
Local Store Marketing
o Free occasional t-shirts at local stores events.
o Direct mail piece – containing brochures sent to surrounding addresses.
o Web page – containing company philosophy, history and news.
o Local magazines that target our core customers, such as Free! Magazine.
o Newspaper campaign – placing several large ads throughout the month to
explain our concept to the local area.
5.2.4 Positioning Statement
Our main focus in marketing will be to increase customer awareness in the surrounding
community. We will direct all of our tactics and programs toward the goal of explaining
who we are and what we are all about. We will price our products fairly, keep our
standards high, and execute the concept so that “word-of-mouth” will be our main
5.3 Sales Strategy
The sales strategy is to build and open new locations in order to increase revenue.
However, this plan will be implemented when the one "market tester" outlet showed
20. potential growth. As each individual location will continue to build its local customer
base over the first three years of operation, the goal of each store is S$104,250 in
annual sales, with the original flagship store expected to earn almost S$200,000 per
5.3.1 Sales Forecast
We anticipate the highest peak on the months of November and December in our sales
forecast, due to the holiday seasons. In November, there is Ramadan, and for non-
muslim Malaysians and Indonesians, it means vacation time. Approximately 1.5
million Indonesians visit Singapore each year, mostly for shopping and dining. Then in
December, we anticipate more tourists coming into Singapore; this explains the jumped
of sales in these last two months of the year.
22. Unit Prices
Belgian Fries $4.00
Italian Soda $1.50
Signature Packaged Sauces $2.00
Belgian Fries $197,856
Italian Soda $41,538
Signature Packaged Sauces $6,712
Total Sales $279,163
Direct Unit Costs
Belgian Fries $0.80
Italian Soda $0.15
23. Signature Packaged Sauces $1.00
Direct Cost of Sales
Belgian Fries $39,571
Italian Soda $4,154
Signature Packaged Sauces $3,356
Subtotal Direct Cost of Sales $61,957
5.4 Strategic Alliances
Our business requires a long relationship with raw suppliers as well as partner vendors.
In Chinese, this relationship is called "guanxi," meaning business bonding. We already
have a long and good standing relationship with Company V in our previous ventures.
For Company Y, Mr. Joe Shmo, the managing director, is a prominent figure in the
society and we hope to strengthen further our business relationship with him and the
During the initial set up of the company, the 4 founders (Guy Fry, Harry Hip, Sam
Sauce, and Carl Cone) will conduct the planning and implementation in building the
brand and the construction of our first outlet. The planning and construction will take
approximately 8 months, in addition to the revision and refinement process that will
take the rest of the 12 month period before our opening in early 2005.
Milestone Start Date
Presentation materials for all stakeholders 1/12/2004 3/12/2004
Follow up with suppliers 1/21/2004 3/22/2004
Follow up with developers 1/21/2004 9/8/2004
Printing materials 2/13/2004 4/10/2004
Marketing communication program 2/21/2004 6/23/2004
Constructions 5/22/2004 12/3/2004
25. In store signage, POP 5/23/2004 10/11/2004
Grand opening materials 6/2/2004 10/13/2004
Hiring staff 7/14/2004 8/12/2004
Open second location 7/1/2005 7/1/2005
Open 3rd and 4th locations 1/1/2006 6/1/2006
Open 5th, 6th, and 7th locations 1/1/2007 12/31/2007
Training staff 9/12/2004 12/10/2004
Web Plan Summary
The website will, of course, show visitors everything about Belgian food culture,
including the history of french fries over time. To make the website interactive, Fresin
Fries will offer gift cards and promotions via the Internet, so our visitors can print the
promotional coupon in PDF format and bring it when they visit Fresin Fries. Visitors can
also download Fresin Fries' theme song as ring tones, or order potato cutters for
Besides the traditional formats of customer service hotline and in-store form, customers
can now write their comments and suggestions on our website, which will be directed to
one of our staff.
So, the website itself will act as the medium between our company and our audience.
In the future, our website will show information on franchising/licensing our brand
26. 6.1 Website Marketing Strategy
We will leverage the visibility of our shopping mall's website by getting them to include
a link to ours. We will also post banners on an official Singapore tourism website.
6.2 Development Requirements
To adequately serve our audience, the front end strategy of our website should be
parallel with our corporate color. The front end design of our website will be entirely
trusted to Mr. Guy Fry.
The diversity of founders' background in our company has enabled a cost efficient
development in our venture. As Mr. Harry Hip and Mr. Carl Cone are experts in
Information Technology, the back end of our website will be developed by these
The initial management team depends on the founders themselves, with little back-up. As
we grow, we will take on additional help in certain key areas. Part of our basic
philosophy will be able to run our executive management as a "knowledge sharing"
fellowship. We will not add additional overhead until absolutely necessary. This will
mean that the initial staff support team will have to work extra. By doing this, we will
keep our overhead as low as possible, allowing us to adequately staff our outlets. This
will also allow us and future business partners to recoup investments as quickly as
possible and enjoy a higher return.
At present time, Fresin Fries is being owned by its 4 founders. Others that have helped on
the development of this business venture will be offeredan opportunity to grow together
with the company at the appropriate time, and when the time comes, the 4 founders’
share will be consolidated as one entity.
27. 7.1 Management Team
Fresin Fries is currently the creative idea of its four founders. As the company is small in
nature, it only requires a simple organizational structure. Implementation of this
organization form calls for all four individuals to make all major management decisions
in addition to monitoring all other business activities.
As we expand into multiple locations, each location will have a primary site manager.
7.2 Organizational Structure
Future organizational structure will include a director of store operations when the store
locations exceed four units. We hope that this individual will come out of the ranks of our
stores’ management. This will provide a supervisory level between the executive level
and the store management level.
Current plan is to have our accounting and payroll functions done by an in-house
bookkeeping. Mr. David Lu will be responsible for accounting and business development
of Fresin Fries, helped by Mr. Harry Hip, acting Head of Human Resources Division.
Possible positions might be added at a later date include marketing manager, purchasing
manager, controller, human resources, R&D and administrative support team.
7.3 Personnel Plan
Our initial employees will include two cashiers, two cooks and two bus boys per location,
with one of each on the premises during open hours. This is considered an ideal personnel
number for a food outlet the size of our own. Each employee will work for 38-40 hours
In the long run, as we expand our product category and retail outlets, we will employ
more people in the middle management to ensure the focus of our work, including site
28. PERSONNEL PLAN
YEAR 1 YEAR 2 YEA
Site Managers $0 $60,000 $96,
Cashiers $36,000 $80,000 $144,
Cook $28,800 $66,000 $115,
Busboy $23,400 $56,000 $94,
TOTAL PEOPLE 12 26
Total Payroll $88,200 $262,000 $449,
The company is now privately held by Harry Hip, Guy Fry, Carl Cone, and Sam Sauce.
Future shares will be offered after two consecutive years of operating in Singapore.
8.1 Start-up Funding
Currently, the company is owned by the original 4 founders, who each will contribute
$200,000 for the same amount of share, 25%. This will more than cover start-up
requirements, and provide the business with a cash cushion to use for expansion over
the first three years.
29. Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Liabilities and Capital
30. Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Additional Investment Requirement
Total Planned Investment
Loss at Start-up (Start-up Expenses)
Total Capital and Liabilities
31. 8.2 Break-even Analysis
Our break-even analysis shows that we need unit sales over 9,700 per month to break
even. We do not expect to begin turning a profit until year three.
Monthly Units Break-even
Monthly Revenue Break-even
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost
32. 8.3 Projected Profit and Loss
As the Profit and Loss shows, Fresin Fries will run at a loss for the first two years, using
up some of the cash reserves initially invested by the founders. As sales increase, we
will expand into new locations to aggressively spread brand recognition. This increase in
visibility will allow us to take up less expensive locations off of Orchard Road, while
maintaining our flagship operation, the first store, in a prime spot.
34. Sales $279,163
Direct Cost of Sales $61,957
Other Costs of Sales $0
Total Cost of Sales $61,957
Gross Margin $217,207
Gross Margin % 77.81%
New location setup $25,000
Total Operating Expenses $299,750
Profit Before Interest and Taxes ($82,543)
35. EBITDA ($82,543)
Interest Expense $0
Taxes Incurred $0
Net Profit ($82,543)
Net Profit/Sales -29.57%
8.4 Projected Cash Flow
The following chart and table show the Projected Cash Flow for Fresin Fries.
Pro Forma Cash Flow
36. Cash Received
Cash from Operations
Cash Sales $279,16
Subtotal Cash from Operations $279,16
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0
New Current Borrowing $0
New Other Liabilities (interest-free) $0
New Long-term Liabilities $0
Sales of Other Current Assets $0
Sales of Long-term Assets $0
New Investment Received $0
Subtotal Cash Received $279,16
Expenditures from Operations
37. Cash Spending $88,200
Bill Payments $244,26
Subtotal Spent on Operations $332,46
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0
Principal Repayment of Current Borrowing $0
Other Liabilities Principal Repayment $0
Long-term Liabilities Principal Repayment $0
Purchase Other Current Assets $0
Purchase Long-term Assets $0
Subtotal Cash Spent $332,46
Net Cash Flow ($53,30
Cash Balance $677,89
38. 8.5 Projected Balance Sheet
Fresin's projected company balance sheet follows. We expect to run at a loss for the
first two years, decreasing our net worth slightly. As the operation becomes more
profitable in the third year, our net worth rises again.
Pro Forma Balance Sheet
Other Current Assets $0
Total Current Assets $677,899
Long-term Assets $0
Accumulated Depreciation $0
Total Long-term Assets $0
Total Assets $677,899
39. Liabilities and Capital
Accounts Payable $29,242
Current Borrowing $0
Other Current Liabilities $0
Subtotal Current Liabilities $29,242
Long-term Liabilities $0
Total Liabilities $29,242
Paid-in Capital $800,000
Retained Earnings ($68,800)
Total Capital $648,657
Total Liabilities and Capital $677,899
Net Worth $648,657
40. 8.6 Business Ratios
The following table outlines some of the more important ratios from the Fast Food
Restaurants and Stands industry. The final column, Industry Profile, details specific
ratios based on the industry as it is classified by the Standard Industry Classification
(SIC) code 5812.
Sales Growth 0.00%
Percent of Total Assets
Other Current Assets 0.00%
Total Current Assets 100.00%
Long-term Assets 0.00%
Total Assets 100.00%
Current Liabilities 4.31%
Long-term Liabilities 0.00%
Total Liabilities 4.31%
Net Worth 95.69%
41. Percent of Sales
Gross Margin 77.81%
Selling, General & Administrative Expenses 107.37%
Advertising Expenses 0.00%
Profit Before Interest and Taxes -29.57%
Total Debt to Total Assets 4.31%
Pre-tax Return on Net Worth -12.73%
Pre-tax Return on Assets -12.18%
Net Profit Margin -29.57%
Return on Equity -12.73%
42. Activity Ratios
Accounts Payable Turnover 9.35
Payment Days 27
Total Asset Turnover 0.41
Debt to Net Worth 0.05
Current Liab. to Liab. 1.00
Net Working Capital $648,657
Interest Coverage 0.00
Assets to Sales 2.43
Current Debt/Total Assets 4%
Acid Test 23.18
Sales/Net Worth 0.43
43. Dividend Payout 0.00
Month 1 Month 2 Month 3 Month 4
Belgian Fries 2% 1,000 1,200 1,440 1,728 2,074
Italian Soda 2% 650 780 936 1,123 1,348
Merchandising 2% 100 120 144 160 180
Signature Packaged Sauces 1% 100 118 139 150 150
Total Unit Sales 1,850 2,218 2,659 3,161 3,751
Unit Prices Month 1 Month 2 Month 3 Month 4
Belgian Fries $4.00 $4.00 $4.00 $4.00 $4.00
Italian Soda $1.50 $1.50 $1.50 $1.50 $1.50
Merchandising $8.50 $8.50 $8.50 $8.50 $8.50
Signature Packaged Sauces $2.00 $2.00 $2.00 $2.00 $2.00
Belgian Fries $4,000 $4,800 $5,760 $6,912 $8,29
44. Italian Soda $975 $1,170 $1,404 $1,685 $2,02
Merchandising $850 $1,020 $1,224 $1,360 $1,53
Signature Packaged Sauces $200 $236 $278 $300 $300
Total Sales $6,025 $7,226 $8,666 $10,257 $12,1
Direct Unit Costs Month 1 Month 2 Month 3 Month 4
Belgian Fries 20.00% $0.80 $0.80 $0.80 $0.80 $0.80
Italian Soda 10.00% $0.15 $0.15 $0.15 $0.15 $0.15
Merchandising 45.00% $3.83 $3.83 $3.83 $3.83 $3.83
Signature Packaged Sauces 50.00% $1.00 $1.00 $1.00 $1.00 $1.00
Direct Cost of Sales
Belgian Fries $800 $960 $1,152 $1,382 $1,65
Italian Soda $98 $117 $140 $168 $202
Merchandising $383 $459 $551 $612 $689
Signature Packaged Sauces $100 $118 $139 $150 $150
Subtotal Direct Cost of Sales $1,380 $1,654 $1,982 $2,313 $2,70
Month 1 Month 2 Month 3 Month 4
Site Managers 0% $0 $0 $0 $0 $0
45. Cashiers 0% $2,000 $2,000 $2,000 $2,000 $2,00
Cook 0% $1,600 $1,600 $1,600 $1,600 $1,60
Busboy 0% $1,300 $1,300 $1,300 $1,300 $1,30
Total People 6 6 6 6 6
Total Payroll $4,900 $4,900 $4,900 $4,900 $4,90
Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4
Sales $6,025 $7,226 $8,666 $10,257 $12
Direct Cost of Sales $1,380 $1,654 $1,982 $2,313 $2,7
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $1,380 $1,654 $1,982 $2,313 $2,7
Gross Margin $4,645 $5,572 $6,684 $7,944 $9,4
Gross Margin % 77.10% 77.11% 77.13% 77.45% 77.7
Payroll $4,900 $4,900 $4,900 $4,900 $4,9
Marketing/Promotion $833 $833 $833 $833 $83
Depreciation $0 $0 $0 $0 $0
Rent $12,000 $12,000 $12,000 $12,000 $12
46. Utilities 15% $125 $125 $125 $125 $12
New location setup $0 $0 $0 $0 $0
Total Operating Expenses $17,858 $17,858 $17,858 $17,858 $17
Profit Before Interest and Taxes ($13,213) ($12,286) ($11,174) ($9,914) ($8,
EBITDA ($13,213) ($12,286) ($11,174) ($9,914) ($8,
Interest Expense $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0
Net Profit ($13,213) ($12,286) ($11,174) ($9,914) ($8,
Net Profit/Sales -219.30% -170.03% -128.94% -96.66% -69.
Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4
Cash from Operations
Cash Sales $6,025 $7,226 $8,666 $10,257 $12,1
Subtotal Cash from Operations $6,025 $7,226 $8,666 $10,257 $12,1
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
47. New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $6,025 $7,226 $8,666 $10,257 $12,1
Expenditures Month 1 Month 2 Month 3 Month 4
Expenditures from Operations
Cash Spending $4,900 $4,900 $4,900 $4,900 $4,90
Bill Payments $478 $14,347 $14,623 $14,952 $15,2
Subtotal Spent on Operations $5,378 $19,247 $19,523 $19,852 $20,1
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $5,378 $19,247 $19,523 $19,852 $20,1
Net Cash Flow $647 ($12,021) ($10,857) ($9,595) ($8,03
48. Cash Balance $731,847 $719,826 $708,969 $699,374 $691,
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4
Assets Starting Balances
Cash $731,200 $731,847 $719,826 $708,969 $699,374 $691,3
Other Current Assets $0 $0 $0 $0 $0 $0
Total Current Assets $731,200 $731,847 $719,826 $708,969 $699,374 $691,3
Long-term Assets $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0
Total Assets $731,200 $731,847 $719,826 $708,969 $699,374 $691,3
Liabilities and Capital Month 1 Month 2 Month 3 Month 4
Accounts Payable $0 $13,860 $14,125 $14,443 $14,762 $15,13
Current Borrowing $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $13,860 $14,125 $14,443 $14,762 $15,13
49. Long-term Liabilities $0 $0 $0 $0 $0 $0
Total Liabilities $0 $13,860 $14,125 $14,443 $14,762 $15,13
Paid-in Capital $800,000 $800,000 $800,000 $800,000 $800,000 $800,0
Retained Earnings ($68,800) ($68,800) ($68,800) ($68,800) ($68,800) ($68,8
Earnings $0 ($13,213) ($25,499) ($36,674) ($46,588) ($55,0
Total Capital $731,200 $717,987 $705,701 $694,526 $684,612 $676,2
Total Liabilities and Capital $731,200 $731,847 $719,826 $708,969 $699,374 $691,3
Net Worth $731,200 $717,987 $705,701 $694,526 $684,612 $676,2